Posts Tagged ‘visteon chapter 11’

Parts making giant Visteon may soon exit bankruptcy after reaching settlement with Ford.

Ford Motor Co.’s one-time partsmaking operations, now known as Visteon, may soon be able to exit bankruptcy protection, following in the corporate footsteps of Delphi Corp., the former General Motors parts arm that this year finally wound up the longest run under Chapter 11 of any company in American history.

The two units were initially created to help Ford and GM spin off stamping and other component operations that they no longer believed possible to operate profitably, especially under their expensive union labor contracts. But even on its own, Visteon, created in 2000, was almost immediately struggling to survive.

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The maker filed for Chapter 11 protection in May of last year and many observers believed that without some assistance from former parent Ford, it would not be able to re-emerge.

But the two companies have resolved a number of outstanding issues, Ford agreeing to waive $268 million in pension and retiree benefit claims against Visteon. The automaker has also agreed to move forward with $600 million in critical new contracts.

After a series of narrow, 11th hour escapes, the clock finally struck for long-troubled auto supplier Visteon Corp., this morning, the company announcing it is filing for Chapter 11 bankruptcy protection.

The one-time Ford partsmaking operation has been in trouble almost since its birth, in late 2000, and has depended on a series of handouts and concessions from its former parent to avoid a financial collapse up until this point. Indeed, it was only through meeting a last-minute deadline to cover interest on its vast debt, barely a month ago, that Visteon was able to remain solvent.

But the company says that the current, deep automotive sales slump, compounded by planned summer production shutdowns, simply made it impossible to keep going without a court-protected reorganization.

“During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment,” said Visteon Chairman and CEO Donald J. Stebbins, in a prepared statement. (more…)